Tuesday, March 29, 2016

WARNING On New Book: "Concrete Economics"

Steve Hanke tweets out:

And Simon Constable writes at Forbes:
How did America get so rich so quickly?

It’s a question at the heart of economics, which in one broad definition, is a study of how some countries get rich and some stay poor.

Some people, including me, would say that the United States benefited hugely from sound property rights and hands-off government (as in “keep your filthy hands off my stuff.”) Then add some bootstraps to pull and a lot of hard work, and then hopefully you get rich.

Not everyone sees it quite like that. For instance, the authors of the recently published book Concrete Economics: The Hamilton Approach to Economic Growth and Policy by Stephen S. Cohen and J. Bradford DeLong, say there was a heavy policy role for government in the early years of the republic, and one that continued quite successfully until it all went wrong starting with the Reagan administration in the 1980s...

Concrete Economics is a well written and well researched book. But it is still one that could be misused by some economic policy makers who might wish to have government put an even heavier had on the economic tiller.

There is a tendency among some people to believe that the government should do ever more in an economy. Such people came out of the economics closet during the financial crisis spouting calls for more regulation....

Unfortunately, as those government hands steering the economy get heavier, the dangers get greater, both for liberty and for economics.

From the books blurb which details the horrific central  planning perspective of the book:
Brilliantly written and argued, Concrete Economics shows how government has repeatedly reshaped the American economy ever since Alexander Hamilton’s first, foundational redesign.

This book does not rehash the sturdy and long-accepted arguments that to thrive, entrepreneurial economies need a broad range of freedoms. Instead, Steve Cohen and Brad DeLong remedy our national amnesia about how our economy has actually grown and the role government has played in redesigning and reinvigorating it throughout our history. The government not only sets the ground rules for entrepreneurial activity but directs the surges of energy that mark a vibrant economy. This is as true for present-day Silicon Valley as it was for New England manufacturing at the dawn of the nineteenth century.

The authors’ argument is not one based on abstract ideas, arcane discoveries, or complex correlations. Instead it is based on the facts—facts that were once well known but that have been obscured in a fog of ideology—of how the US economy benefited from a pragmatic government approach to succeed so brilliantly.

Understanding how our economy has grown in the past provides a blueprint for how we might again redesign and reinvigorate it today, for such a redesign is sorely needed.

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